Scott Grannis, the Calafia Beach Pundit, outlines a different “stimulus path”:
Scott Rasmussen crunches the numbers:
As president, Obama lost the support of Republicans in February during the debate over the stimulus package. Over the summer, economic concerns and the health care debate cost the president support among unaffiliated voters. By October, a month-by-month review showed that Obama’s overall job approval had slipped to 48% among Likely Voters.
First, a few obsevations:
1. Democrats are getting hammered in swing state Virginia. It’s not just Bob McDonnell, down ticket, too.
Here is Obama economic guru Larry Summers at the Economic Club of New York: “I don’t find there to be much evidence that suggests that raising top marginal tax rates from 35 to 39 percent that will be implicit in the repeal of the Bush tax rates will do substantial damage to incentives in the economy.”
That the US economy has stopped shrinking is certainly good news. But what kind of recovery is this? Strip out Cash for Clunkers and 3Q GDP growth came in at 1.6 percent. Also strip out slowing inventory cuts and GDP would have been just 0.6 percent. Then you have a report that the WH has overestimated the number of jobs created by the stimulus.
Now they tell us. A new NBER paper from Harvard’s Alberto F. Alesina and Silvia Ardagna (“Large Changes in Fiscal Policy: Taxes Versus Spending”) makes the case for tax cuts over spending as stimulus:
This has to be a classic piece of analysis by David Rosenberg:
Without either deep spending cuts or tax increases (a dirty three-letter word in the U.S.A. — remember Bush Sr.’s “read my lips” back in the early 90s that cost him the election?) the only way out of this fiscal mess caused perhaps by the prior Administration and now accentuated by the current Administration will be by monetizing the debt. … In the final analysis, we all should know how this is going to play out. It is going to be somebody else that foots the bill for all this government incursion, and that is very likely the creditors who hold U.S. government paper. Not that the U.S. would ever default; that will never happen. However, there is very likely going to be a stage where this mountain of public sector debt gets monetized, and while gold is inherently difficult to value, what is going to drive the price higher, in the future, to new record highs will be the supply of bullion relative to the supply of dollars. ( … Let’s face it, the degree of retrenchment that would be needed to bring the deficit-to-GDP ratio down to the 3-4% level that would allow the debt/GDP ratio to stabilize, would simply be too much for the U.S. electorate to put up with.